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Fisher - He Doesn't Like The Fed Interfering On The Stock Market

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http://dallasfed.org/news/speeches/fisher/2011/fs110817.cfm

In the interest of full disclosure, I should add that I was also concerned that just by tweaking the language the way the committee did, our action might be interpreted as encouraging the view that there is an FOMC so-called “Bernanke put” that would be too easily activated in response to a reversal in the financial markets. For those of you unfamiliar with the expression “Bernanke put,” or more generally, a “central bank put,” this term refers to the concept that a central bank will allow the stock market to rise significantly without tightening monetary policy, but will ease monetary policy whenever there is a stock market “correction.” Given the extent of the drop in the stock market leading up to and following Standard & Poor’s downgrade of U.S. debt, combined with the FOMC’s commitment to hold short-term rates near zero until mid-year 2013, some cynical observers might interpret such a policy action as a “Bernanke put.” My long-standing belief is that the Federal Reserve should never enact such asymmetric policies to protect stock market traders and investors. I believe my FOMC colleagues share this view.

An interesting speech.

If the Fed doesn't play what will Wall Street do? I hope Fisher doesn't work near as book depositories.

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http://dallasfed.org...11/fs110817.cfm

An interesting speech.

If the Fed doesn't play what will Wall Street do? I hope Fisher doesn't work near as book depositories.

What's interesting is that Bullard was also on the airwaves the same day (today) saying:

- No more QE

- We might even raise rates before 2013

I see this as a perception management exercise but I don't understand the detailed mechanism behind this communications approach. I am naively assuming they are preparing for bad news (e.g. no sweeties) at Jackson Hole but I wish I understood exactly how this worked. Coordinated and repetitive communications is becoming recurrent with the US and EU central banks, sometimes we get a whole stream of contradicting communications on the same day by the same group of people.

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What's interesting is that Bullard was also on the airwaves the same day (today) saying:

- No more QE

- We might even raise rates before 2013

I see this as a perception management exercise but I don't understand the detailed mechanism behind this communications approach. I am naively assuming they are preparing for bad news (e.g. no sweeties) at Jackson Hole but I wish I understood exactly how this worked. Coordinated and repetitive communications is becoming recurrent with the US and EU central banks, sometimes we get a whole stream of contradicting communications on the same day by the same group of people.

It could be that there are big divisions in the Fed and the arguments have gone public, I can imagine ego getting in the way with the biggest ego being Bernanke the man whose career is built on studying the depression and dissecting policy failures. One of the main causes of the depression was leverage, yet this appears lost on policy makers who think they can keep defying gravity.

The biggest irony will probably be Bernanke being the biggest policy failure of them all, giving academics endless papers to write about how someone got it so wrong.

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the mood is changing in the US and obama is looking like he may well get hte blame.

Well duuuh! He was ALWAYS going to get the blame.

Unless he has the balls to come out and say "look, the republicans screwed up America for 8 years and they did it so bad it's going to take more than 8 years to fix it, especially with them controlling congress and BLOCKING all attempts to fix it in attemt to discredit the democrat president."

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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